City Manager Milton Dohoney addressed City Council during Monday's budget committee meeting to discuss a plan to restructure $29 million in funding for the streetcar. / The Enquirer/Cara Owsley

Written by

Jane Prendergast

Getting the project rolling

FINDING THE FUNDS

• The city would establish a $15 million fund to finance the utilities relocation pending a resolution of the dispute with Duke Energy. The $15 million would come from the city’s recent $37 million sale of land adjacent to the former Blue Ash Airport, money the city expects to get back because it expects to prevail over Duke in court.

• The city would change the source of funds to repay $14 million of $25 million in notes to be issued for the streetcar. That money originally was expected to come from the Downtown South/Riverfront Tax Increment Financing District, which has seen significant reductions in revenue since 2010 because of decreasing property values.

• City Manager Milton Dohoney proposes that $14 million instead come from a fund established in 1995 to collect revenue from major Downtown facilities such as Saks Fifth Avenue, and the Westin and Hyatt hotels.

CLOSING THE GAP

• The remaining $11 million (of the $25 million in notes) would be repaid over 20 years through a bond supported by revised revenues from the Downtown South TIF District – a plan based on expectations that the district will rebound over the next two decades with The Banks, the under-construction casino and the streetcar itself spurring growth.

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The latest wrinkle in the years-long debate over Cincinnati’s streetcar pits the project, Downtown and Over-the-Rhine against the rest of the city’s neighborhoods.

After three hours, City Council voted 6-3 Monday to shuffle $29 million into the streetcar from other funds.

They heard first from about 50 residents, fairly evenly divided on the topic. But many of those opposed to the $110 million-plus streetcar and this money move lived in city neighborhoods, and many supporters lived Downtown and in Over-the-Rhine, two neighborhoods through which the streetcar will travel.

The key to the neighborhood opposition was the $15 million to be taken from the proceeds of the sale of city-owned Blue Ash Airport, money neighborhood activists have insisted for years was promised to them.

City Manager Milton Dohoney reiterated that the money would be paid back, but many doubted that.

“Stewardship is management for others,” said William Minor of Mount Lookout.

“When your term is up, we’re going to be stuck with whatever you decide to build.”

Several spoke angrily toward Mayor Mark Mallory, who they said promised during his 2005 mayoral campaign that neighborhoods would get the airport money. Even though Mallory says the streetcar and neighborhoods aren’t in competition, many in the crowd don’t see it that way.

The Rev. Dock Foster, of the Baptist Ministers Conference, put it this way: “Get you a bus, put some wheels on it and let it go up through the neighborhoods.”

Former Councilwoman Amy Murray said it’s wrong to proceed now with a legal dispute over utility relocation unknown.

City Hall contends that Duke Energy should have to pay for relocating utility lines beneath city streets for transportation improvement projects such as the streetcar. Duke disagrees, saying the city should pay the relocation cost – originally estimated at $18.7 million – because the underground lines wouldn’t have to be moved if not for the streetcar project.

If City Hall does not cover the expense, Duke has said, the price could be passed on to the utility’s Cincinnati customers.

“You have to sit and wait” until the utilities issue is resolved, Murray said. And this money is “never going back to the neighborhoods.”

But the project also has huge fans.

Jean-François Flechet, owner of the popular Taste of Belgium in Over-the-Rhine, said his 40 to 50 employees have their jobs because the restaurant sits on the streetcar line. A rubber-tire trolley, he said, is not the same.

Jenny Kessler, a University of Cincinnati interior design graduate and long-time streetcar supporter, said she wasn’t calling council members insane, but she pointed out that the definition of insanity is trying something over and over and expecting a different outcome.

“I wonder why I’m back here,” she said, after two citywide votes to stop the streetcar failed.

Mallory doesn’t usually attend committee meetings and wasn’t at this one. Dohoney said the administration never got a policy directive on spending that money.

Money eventually for neighborhoods

The mayor and city administration still say the money will be spent to help neighborhoods – once it’s paid back after the Duke court process. Mallory also says this should not be a battle between the streetcar and neighborhoods because the streetcar will boost the tax base and that money can be spent on all neighborhoods.

Streetcar supporters were equally as passionate, saying the city should act now to move the project forward. That’s why Dohoney wants to do the money move – he’s ready to move ahead with bidding the project and doesn’t want to wait until the legal battle ends over whether the city or Duke should pay for the moving of utilities.

Joan Kaup, a longtime arts supporter, told council to stay the course.

“We’re almost there,” she said. “Do what’s necessary.”

Changing realities of city finances

The revised streetcar financing plan recommended Monday is the latest instance in which City Hall has had to adjust the project because of changing economic realities.

Last year, after the state of Ohio withdrew nearly $52 million previously targeted for the streetcar, city leaders were forced to substantially shorten the route. Originally scheduled to run from Downtown’s central riverfront to Uptown near the University of Cincinnati, the streetcar route was redesigned to run only from Government Square to Over-the-Rhine just north of Findlay Market.

Later, an $11 million federal grant allowed City Hall to extend the southern leg of the streetcar route to The Banks on the riverfront.

The approval likely will be finalized Wednesday by the full council, but all nine voted Monday, so the outcome shouldn’t change.

Monday’s meeting also may have been an early look at next year’s campaign for mayor.

Though neither John Cranley, a former councilman and streetcar opponent, nor Qualls, the vice mayor, has officially announced their candidacy, many expect them both to run.

Cranley, former councilman and streetcar opponent, told council not to insult his intelligence by suggesting the money will be replaced once the city wins its legal battle with Duke. Addressing Qualls, who leads the committee, he referred to council members as elitists having “well-placed friends.”

Qualls responded by saying she has supported the streetcar project since the very first vote, in 2008, and that she is one of the city’s biggest supporters of neighborhoods.

She welcomes the support of all streetcar advocates, she said, because she shares with them “a commitment to the economic development and vitality of the city, and understands the critical role the streetcar plays in continuing the positive momentum the city is experiencing.”

The streetcar, whose first phase will run from The Banks to Over-the-Rhine just north of Findlay Market, is tentatively set to open in the summer of 2015.